Question

a business must not only look at its direct competitors, but also must contend with those firms that offer a product that a consumer might alternatively choose. for example, mcdonald's and burger king can be considered competitors and if one firm raises prices the other firm might gain its customers. however, if both firms raise their prices, customers may choose to purchase pizza instead. porter refers to this as the force of in the market.

Answer 1

A business must not only look at its direct competitors, but also must contend with those firms that offer a product that a consumer might alternatively choose. Porter refers to this as the force of substitutes in the market.

What factors affect the market?

Supply and demand in an economy are regulated by government action as well as other causes such as social, demographic, cultural, economic, technical, political, and legal pressures. The supply of a product may be affected by the weather.

Why does the market operate the way it does?

The free-market system is driven by self-interest. For their own financial advantage, people manufacture commodities and services. The struggle for consumers' dollars is what is known as competition among producers.

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